The Mortgage Works will continue to lend on properties with an EPC rating of F or G. However, the Valuer will assess the EPC data and detail any works needed to bring the property to a minimum ‘E’ rating in the valuation report.
The costs of any works will be reflected in the valuation figure. A condition will be placed on the mortgage offer confirming the works must be undertaken within 3 months, unless your client sends us proof of a valid exemption or an updated EPC prior to completion. Exemption details can be found at Domestic Private Rented Landlord Guidance.
The Mortgage Works reserves the right to reinspect the property 3 months after completion to ensure the works have been carried out.
As per current retention policy, the application can proceed where the cost of work is no more than:
- £2,500 (for properties with a current value of up to £100,000)
- £5,000 (for properties with a current value over £100,000)
A full retention will be applicable if the cost of the work exceeds the values above.
The maximum loan and LTV is calculated on the purchase price or before works figure, whichever is lower.
On purchase applications where an EPC record isn’t available to the Valuer, they’ll be unable to recommend the property as a suitable security and we’ll request evidence of EPC details or exemption from you or your client.
For portfolio applications the valuation policy detailed here will only apply to the subject security of the new application. We won’t currently assess EPC ratings on wider portfolio properties held with other lenders.
As part of any further advance or remortgage with capital raising application, for example to purchase or refurbish another property, we’ll expect your client to carry out the works required to bring the security asset up to a minimum ‘E’ rating.
